Did You Get a Debt Validation Letter? Don’t Panic

People deal with debt worldwide, and credit collection agencies harass some. 15% of Americans have been sued by a debt collector, according to a 2017 report by the Consumer Financial Protection Bureau. According to CNBC.com and a report from the Urban Institute, roughly one in three Americans have had debt in collections.

You just received a debt validation letter. And now, you just received a letter saying you owe an alleged debt to a debt collection agency you’ve never heard of. The letter informs you that they are a debt collector and have taken over collection efforts from the original creditor. They outline the last time you paid the original creditor, the amount owed, and when payment is due. 

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What is a debt validation letter?

A debt validation letter comes from a debt collector. It is a written notice from them stipulating all the particulars of the alleged amount owed, the name of the creditor, and a statement that the debt is assumed valid unless you dispute it within 30 days of first contact. 

A federal law known as the Fair Debt Collection Practices Act (FDPCA) outlines consumers’ right to confirm that any debt they’re being contacted about is accurate and that the collector is not unfairly harassing them. These consumer rights are taken very seriously. There are multiple agencies — including the Federal Trade Commission (FTC), the Consumer Finance Protection Bureau (CFPB) and the major credit bureaus (Experian, Equifax and TransUnion) — that are tasked with making sure your rights are respected.

In 2020, the FTC received more than 80,000 complaints about debt collectors. Almost half of those were from consumers who reported efforts to collect money they didn’t actually owe, so it’s very possible that your debt isn’t valid. The burden of proof is on the debt collector, and the debt validation letter is the only way for you to know for sure.

It should not be confused with a debt verification letter, which is what YOU send a creditor. If you send a debt verification letter, the creditor should respond with a debt validation letter.

Collection agencies send out a debt validation letter to consumers to inform them they are handling collection activities on past due balances from the original creditors. It usually attempts to collect on unsecured debts such as credit card debt, medical bills, or personal loans. Proper debt validation letters tell the individual receiving them the amount of the debt, the name of the creditor who originally had the debt, and instructions on how to dispute the debt.  

Important: If you do not send a dispute letter within 30 days, it is assumed that the debt is valid.

Debt validation letters generally come from debt collectors that have acquired debt from an original creditor. It usually attempts to collect on unsecured debts such as credit card debt and personal loans.

READ MORE: How to deal with debt collectors when you can’t pay

Do you need a debt validation letter?

Yes. Even if you’re fairly confident that the debt is yours, it is essential that you request a validation letter. You do this by sending them a debt verification letter. If you receive an unsolicited debt validation letter, don’t panic. Send a debt verification letter requesting the relevant information, and you can use that to buy some time to research the debt on your own. However, don’t ignore these letters. There are some states where you could go to jail for certain unpaid debts.

READ MORE: 5 easy steps to pay debt over $10,000

Debt validation vs. debt verification: What’s the difference?

These two terms often get confused because they are used interchangeably. According to the Fair Debt Collection Practices Act, each consumer is entitled to have any debts they have in collections validated. However, the act does not clearly define what constitutes a legitimate debt validation.

Debt validation

A debt validation letter is a letter your creditor sends to you after acquiring your debt or in response to a debt verification letter you send.

According to the Fair Debt Collection Practices Act, the letter must include:

  • Which creditor the debt collector represents
  • The address of the original creditor
  • The total amount owed to the original creditor and the last payment made. 
  • The disclosure that you have a legal right to dispute the debt’s validity within 30 days.
  • Confirmation that if the debt is disputed within 30 days, it will be verified through certified mail delivery with a return receipt.
  • A disclosure that if you request more information about your creditor, that information has to be provided within 30 days of receiving the request.

The letter must be mailed within five days of the first time the debt collector contacts any consumer via phone call or mail.

Debt verification

A debt verification letter is sent by consumers to request verification of any debt a creditor is trying to collect. It must be mailed within 30 days of receiving a debt validation letter.

Debt validation letters can also be sent when no debt validation letter has been received; for example, as part of the process of fixing a mistake you’ve noted on your credit report.

You should send any verification letter by certified mail with a return receipt in case a creditor tries to claim you never sent one.

You got a debt validation letter — what’s next?

After receiving a debt validation letter, your next step should be to send a debt verification letter to the collection agency. You must do this within 30 days of the debt validation request.

Even if you have not received a validation letter and have a debt collector contacting you, you should send a verification letter requiring the debt collector to verify the debt is yours. 

Do not pay debts or give any personal account numbers until the debt has been verified.

Information the debt verification letter must legally contain  

There is certain information that you need to include when you write a debt verification letter. It must include:

  • The date the debt collector contacted you
  • The method of contact
  • A request that the debt be verified
  • Request for proof that the debt was legally obtained.

For proof, you can request:

  • Copies of the contract between the debt collector and your original creditor for the purchase of your debt
  • Documentation of the debt’s age and how long it is past due
  • Documentation proving the total amount you owe
  • The name of your creditor or financial institution
  • The account number for the past-due debt
  • A copy of your last billing statement with the original creditor or lender
  • The original creditor’s address
  • Documentation of the last payment you made on the account
  • Evidence that the debt is still within your state’s statute of limitations
  • In addition, you will need to include your name, address, date, information about the collections agency and the number of the relevant account.

How to write a debt verification letter

The Consumer Financial Protection Bureau offers an array of letter templates targeting specific problems you may encounter. These include:

There are plenty of other templates available, but some may be labeled as “sample debt validation letters.” Even some law firms confuse the two.

READ MORE: Are you drowning in debt? Here’s how to save yourself

Learn more about the importance of debt verification letters by watching this video:

Why are these letters important?

Validation of the debt will ensure that the debt is yours and you are paying the right company for the right debt. Anytime a collector attempts to collect a debt, you have the right to verify the details and ask for proof.

It is essential to know that any debts trying to be collected from you are debts you owe. The Consumer Financial Protection Bureau is in place for this specific reason to protect consumers from scams on paying illegitimate debts.

Know the statute of limitations

One factor to consider when you receive a debt validation letter is the date of the last payment of the original debt. It is not uncommon for collection agencies to try and collect old debts. Make sure that the statute of limitations has not expired on your debt.

Your state attorney general’s office will also provide information on all state laws regarding statutes of limitations.

The bottom line

Ignoring the debt can have negative consequences, including damage to your credit, continuous debt collection attempts, and possibly even a lawsuit. If you received one of these debt validation letters, do not ignore it.

If you are uncertain about the debt you’re being asked to pay, understanding the debt validation process is essential to understanding and controlling your personal finance.


Does a debt validation letter mean I owe this debt? 

No, you need to send them a debt verification letter. The debt validation letter is a letter you send to the debt collector if you are disputing the validity of their claim and you want them to provide you with proof that their claim is valid.

What to do if I receive a debt validation letter that is not my debt?

You will want to escalate the issue with the debt collector within 30 days of receiving the debt validation letter. Include disputing that you owe the debt, requesting additional verification that this is your debt, and asking for the name and address of the original creditor. You will want to send all responses via certified mail with a return receipt and delivery confirmation.
Remember that co-signed debt is your legal responsibility and the debt collections agency has the right to collect.

How do I write a debt verification letter?

There are a variety of templates and samples online that are straightforward and concise and ask for the specifically requested data. There is no need to spend money on this, aside from postage, which should cost about $8.

How does a collection agency get my information?

In most instances, lenders sell debts to collection agencies for pennies on the dollar. The debt collection agencies then work very hard and try to recoup some of their investment. They do this by tracking you down and hounding you until you pay. They can search postal records, banks and even voter registration. And don’t forget, the internet is also a potent search tool. However, the Fair Debt Collection Practices Act offers you some protections, restricting how and when they can legally contact you.

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